Risk management in cargo transportation operations is fundamental to enable your company to reduce costs and please your clients.

Did you know that risk management starts with the recruiting of your team of collaborators and continues after sales? Thereby you ensure the control of the entire management process.

1. Recruitment

The collaborator selection process is an essential ingredient of a recipe for successful risk management. To choose the most qualified professional is tantamount to reducing by about 100% any future headaches, like expenses from misbehavior or non-compliance with guidance provided, which increases the risk of losses during cargo transportation, as well as the probability of work accident lawsuits.

2. Planning

Risk management itself can be split into four stages:

- Risk identification;
- Risk analysis;
- Risk Assessment;
- Treatment to minimize the possibilities of accidents and incidents.

The risk identification, risk analysis and risk assessment phases are performed as follows: first the value of the cargo and the conditions involving the course of transit are considered, and then the best team to carry out the delivery is chosen.

Treatment means the identification and implementation of technology solutions and preventive measures that can reduce the risks identified.

It is not a simple process, after all, one has to analyze several aspects, such as costs, safety, monitoring of the team and vehicle, and client service.

3. Insurances

The safety of the cargo transportation process also involves the placement of insurance for this type of operation. There are two types of insurance, viz.:

Inland Transit insurance: the cover for domestic cargo transportation insures against loss of and damage to merchandise during transportation by any mode whether by road, air or water, in the event of an accident with the vehicle caused by collision, overturning, impact, tumbling fire or explosion. This type of insurance also covers armed robbery of merchandise or disappearance of cargo (when also the vehicle is stolen). However, the robbery cover has to be contracted as an additional cover.

International cargo transportation insurance: This type of insurance is used for foreign trade operations. The cargo owners usually contract multimodal or intermodal insurance to protect themselves against the risks involving any type of transportation that may be used to carry their cargo along the entire transit, from origin to final destination. In addition to indemnification for eventual loss of or damage to cargo transported, this type of insurance also covers taxes, freight, expected profits and sundry expenses.

4. Unloading and assistance

It may be said that unloading is the last part of the risk management process. After all, the cargo has been delivered and the operation is practically concluded.

However, it is then that the real work of identifying failures, which may have occurred during the course of transit, commences, reinitiating the cycle of identification, analysis and assessment of new risks, as well as the pursuit of tools and methods capable of minimizing problems and further maximizing performance.

At this stage, it is essential to listen to what the client has to say, and also to check the reports generated by technology solutions, and the evaluation of the operations manager. These tasks will provide insights for other corrections, and show that your company cares about the client’s opinion, thus increasing the chances for fidelization.

You can count on CredRisk Marine to provide consultancy on Risk Management and assist your company in taking appropriate steps in various situations.